AB 73

The Legislature finds and declares that it has provided reforms and incentives to facilitate and expedite the approval and construction of affordable housing. Those reforms and incentives can be found in the following provisions:

(a) Housing element law (Article 10.6 (commencing with Section 65580) of Chapter 3).

(b) Extension of statute of limitations in actions challenging the housing element and brought in support of affordable housing (subdivision (d) of Section 65009).

(c) Restrictions on disapproval of housing developments (Section 65589.5).

(d) Priority for affordable housing in the allocation of water and sewer hookups (Section 65589.7).

(e) Least cost zoning law (Section 65913.1).

(f) Density bonus law (Section 65915).

(g) Accessory dwelling units (Sections 65852.150 and 65852.2).

(h) By-right housing, in which certain multifamily housing are designated a permitted use (Section 65589.4).

(i) No-net-loss-in zoning density law limiting downzonings and density reductions (Section 65863).

(j) Requiring persons who sue to halt affordable housing to pay attorney fees (Section 65914) or post a bond (Section 529.2 of the Code of Civil Procedure).

(k) Reduced time for action on affordable housing applications under the approval of development permits process (Article 5 (commencing with Section 65950) of Chapter 4.5).

(l) Limiting moratoriums on multifamily housing (Section 65858).

(m) Prohibiting discrimination against affordable housing (Section 65008).

(n) California Fair Employment and Housing Act (Part 2.8 (commencing with Section 12900) of Division 3).

(o) Community redevelopment law (Part 1 (commencing with Section 33000) of Division 24 of the Health and Safety Code, and in particular Sections 33334.2 and 33413).

(p) Streamlining housing approvals during a housing shortage (Section 65913.4).

(p) Housing sustainability districts (Chapter 11 (commencing with Section 66200)).

The Legislature finds and declares that it has provided reforms and incentives to facilitate and expedite the approval and construction of affordable housing. Those reforms and incentives can be found in the following provisions:

(a) Housing element law (Article 10.6 (commencing with Section 65580) of Chapter 3).

(b) Extension of statute of limitations in actions challenging the housing element and brought in support of affordable housing (subdivision (d) of Section 65009).

(c) Restrictions on disapproval of housing developments (Section 65589.5).

(d) Priority for affordable housing in the allocation of water and sewer hookups (Section 65589.7).

(e) Least cost zoning law (Section 65913.1).

(f) Density bonus law (Section 65915).

(g) Accessory dwelling units (Sections 65852.150 and 65852.2).

(h) By-right housing, in which certain multifamily housing are designated a permitted use (Section 65589.4).

(i) No-net-loss-in zoning density law limiting downzonings and density reductions (Section 65863).

(j) Requiring persons who sue to halt affordable housing to pay attorney fees (Section 65914) or post a bond (Section 529.2 of the Code of Civil Procedure).

(k) Reduced time for action on affordable housing applications under the approval of development permits process (Article 5 (commencing with Section 65950) of Chapter 4.5).

(l) Limiting moratoriums on multifamily housing (Section 65858).

(m) Prohibiting discrimination against affordable housing (Section 65008).

(n) California Fair Employment and Housing Act (Part 2.8 (commencing with Section 12900) of Division 3).

(o) Community redevelopment law (Part 1 (commencing with Section 33000) of Division 24 of the Health and Safety Code, and in particular Sections 33334.2 and 33413).

(p) Streamlining housing approvals during a housing shortage (Section 65913.4).

(q) Housing sustainability districts (Chapter 11 (commencing with Section 66200)).

For the purposes of this chapter, the following definitions shall apply:

(a) “Approving authority” means an agency of a city, county, or city and county that is established in the city’s, county’s, or city and county’s housing sustainability district ordinance and designated to review permit applications for development within the housing sustainability district in accordance with Section 66205.

(b) “City, county, or city and county” includes a charter city, charter county, or charter city and county.

(c) “Department” means the Department of Housing and Community Development.

(d) “Developable land” means the area within a housing sustainability district that can be feasibly developed into residential or mixed-use development, including land area occupied by or associated with underutilized residential, commercial, or industrial buildings or uses that have the potential to be converted for residential or mixed use, in accordance with the rules and regulations of the department, except for the following:

(1) Land that is already substantially developed, including existing parks and open space.

(2) Areas exceeding one-half acre that are unsuitable for development due to topographical features or environmental preservation.

(e) “Eligible location” means either of the following:

(1) An area located within one-half mile of public transit.

(2) An area that, by virtue of existing infrastructure, transportation access, existing underutilized facilities, or location, is highly suitable for a residential or mixed-use housing sustainability district.

(f) “Mixed use” means that up to 50 percent of the square footage of a proposed development is designated for nonresidential use.

(g) “Project” means a proposed residential or mixed use development within a housing sustainability district.

(h) “Housing sustainability district” means an area within a city, county, or city and county designated pursuant to this chapter that is superimposed over an area within the jurisdiction of the city, county, or city and county in which a developer may elect to develop a project in accordance with either the housing sustainability district ordinance or the city’s, county’s, or city and county’s otherwise applicable general plan and zoning ordinances.

(i) “Housing sustainability district ordinance” means the ordinance adopted by a city, county, or city and county pursuant to Section 66201 establishing a housing sustainability district.

(a) A city, county, or city and county, upon receipt of preliminary approval by the department pursuant to Section 66202, may establish by ordinance a housing sustainability district in accordance with this chapter. The city, county, or city and county shall adopt the ordinance in accordance with the requirements of Chapter 4 (commencing with Section 65800).

(b) An area proposed to be designated a housing sustainability district pursuant to this chapter shall satisfy all of the following requirements:

(1) The area is an eligible location, including any adjacent area served by existing infrastructure and utilities.

(2) The area is zoned to permit residential use through the ministerial issuance of a permit. Other uses may be permitted by conditional use or other discretionary permit, provided that the use is consistent with residential use.

(3) Density ranges for multifamily housing for which the minimum densities shall not be less than those deemed appropriate to accommodate housing for lower income households as set forth in subparagraph (B) of paragraph (3) of subdivision (c) of Section 65583.2, and a density range for single-family attached or detached housing for which the minimum densities shall not be less than 10 units to the acre. A density range shall provide the minimum dwelling units per acre and the maximum dwelling units per acre.

(4) The development of housing is permitted, consistent with neighborhood building and use patterns and any applicable building codes.

(5) Limitations or moratoriums on residential use do not apply to any of the area, other than any limitation or moratorium imposed by court order.

(6) The area is not subject to any general age or other occupancy restrictions, except that the city, county, or city and county may allow for the development of specific projects exclusively for the elderly or the disabled or for assisted living.

(7) Housing units comply with all applicable federal, state, and local fair housing laws.

(8) The area of the proposed housing sustainability district does not exceed 15 percent of the total land area under the jurisdiction of the city, county, or city and county unless the department approves a larger area in furtherance of the purposes of this chapter.

(9) The total area of all housing sustainability districts within the city, county, or city and county does not exceed 30 percent of the total land area under the jurisdiction of the city, county, or city and county.

(10) The housing sustainability district ordinance provides for the manner of review by an approving authority, as designated by the ordinance, pursuant to Section 66205 and in accordance with the rules and regulations adopted by the department.

(11) Development projects in the area comply with the requirements of Section 66208, regarding the replacement of affordable housing units affected by the development.

(c) The city, county, or city and county may apply uniform development policies or standards that will apply to all projects within the housing sustainability district, including parking ordinances, public access ordinances, grading ordinances, hillside development ordinances, flood plain ordinances, habitat or conservation ordinances, view protection ordinances, and requirements for reducing greenhouse gas emissions.

(d) The city, county, or city and county may provide for mixed-use development within the housing sustainability district.

(e) An amendment or repeal of a housing sustainability district ordinance shall not become effective unless the department provides written approval to the city, county, or city and county. The city, county, or city and county may request approval of a proposed amendment or repeal by submitting a written request to the department. The department shall evaluate the proposed amendment or repeal for the effect of that amendment or repeal on the city’s, county’s, or city and county’s housing element. If the department does not respond to a written request for amendment or repeal of an ordinance within 60 days of receipt of that request, the request shall be deemed approved.

(f) The housing sustainability district ordinance shall do all of the following:

(1) Provide for an approving authority to review permit applications for development within the housing sustainability district in accordance with Section 66205.

(2) (A) Subject to subparagraph (B), require that at least 20 percent of the residential units constructed within the housing sustainability district be affordable to very low, low-, and moderate-income households and subject to a recorded affordability restriction for at least 55 years. A development that is affordable to persons and families whose income exceeds the income limit for persons and families of moderate income shall include no less than 10 percent of the units for lower income households at affordable housing cost, as defined by Section 50052.5 of the Health and Safety Code, unless the city, county, or city and county has adopted a local ordinance that requires that a greater percentage of the units be for lower income households, in which case that ordinance shall apply.

(B) For a city, county, or city and county that includes its entire regional housing needs allocation pursuant to Section 65584 within the housing sustainability district, the percentages of the total units constructed or substantially rehabilitated within the housing sustainability district shall match the percentages in each income category of the city’s, county’s, or city and county’s regional housing need allocation.

(C) Nothing in this section shall be construed to expand or contract the authority of a local government to adopt an ordinance, charter amendment, general plan amendment, specific plan, resolution, or other land use policy or regulation requiring that any housing development contain a fixed percentage of affordable housing units.

(3) Specify that a project is not deemed to be for residential use if it is infeasible for actual use as a single or multifamily residence.

(4) Require that an applicant for a permit for a project within the housing sustainability district do the following, as applicable:

(A) Certify to the approving authority that either of the following is true, as applicable:

(i) That the entirety of the project is a public work for purposes of Chapter 1 (commencing with Section 1720) of Part 7 of Division 2 of the Labor Code.

(ii) If the project is not in its entirety a public work, that all construction workers employed in the execution of the project will be paid at least the general prevailing rate of per diem wages for the type of work and geographic area, as determined by the Director of Industrial Relations pursuant to Sections 1773 and 1773.9 of the Labor Code, except that apprentices registered in programs approved by the Chief of the Division of Apprenticeship Standards may be paid at least the applicable apprentice prevailing rate. If the approving authority approves the application, then for those portions of the project that are not a public work all of the following shall apply:

(I) The applicant shall include the prevailing wage requirement in all contracts for the performance of the work.

(II) All contractors and subcontractors shall pay to all construction workers employed in the execution of the work at least the general prevailing rate of per diem wages, except that apprentices registered in programs approved by the Chief of the Division of Apprenticeship Standards may be paid at least the applicable apprentice prevailing rate.

(III) Except as provided in subclause (V), all contractors and subcontractors shall maintain and verify payroll records pursuant to Section 1776 of the Labor Code and make those records available for inspection and copying as provided in therein.

(IV) Except as provided in subclause (V), the obligation of the contractors and subcontractors to pay prevailing wages may be enforced by the Labor Commissioner through the issuance of a civil wage and penalty assessment pursuant to Section 1741 of the Labor Code, which may be reviewed pursuant to Section 1742 of the Labor Code, within 18 months after the completion of the project, by an underpaid worker through an administrative complaint or civil action, or by a joint labor-management committee through a civil action under Section 1771.2 of the Labor Code. If a civil wage and penalty assessment is issued, the contractor, subcontractor, and surety on a bond or bonds issued to secure the payment of wages covered by the assessment shall be liable for liquidated damages pursuant to Section 1742.1 of the Labor Code.

(V) Subclauses (III) and (IV) shall not apply if all contractors and subcontractors performing work on the project are subject to a project labor agreement that requires the payment of prevailing wages to all construction workers employed in the execution of the project and provides for enforcement of that obligation through an arbitration procedure. For purposes of this subclause, “project labor agreement” has the same meaning as set forth in paragraph (1) of subdivision (b) of Section 2500 of the Public Contract Code.

(VI) Notwithstanding subdivision (c) of Section 1773.1 of the Labor Code, the requirement that employer payments not reduce the obligation to pay the hourly straight time or overtime wages found to be prevailing shall not apply if otherwise provided in a bona fide collective bargaining agreement covering the worker. The requirement to pay at least the general prevailing rate of per diem wages does not preclude use of an alternative workweek schedule adopted pursuant to Section 511 or 514 of the Labor Code.

(B) (i) For projects for which any of the following conditions apply, certify to the approving authority that a skilled and trained workforce will be used to complete the project if the approving authority approves the project application:

(I) On and after January 1, 2018, until December 31, 2021, the project consists of 75 or more units that are not 100 percent subsidized affordable housing and will be located within a jurisdiction located in a coastal or bay county with a population of 225,000 or more.

(II) On and after January 1, 2022, until December 31, 2025, the project consists of 50 or more units that are not 100 percent subsidized affordable housing and will be located within a jurisdiction located in a coastal or bay county with a population of 225,000 or more.

(III) On and after January 1, 2018, until December 31, 2019, the project consists of 75 or more units that are not 100 percent subsidized affordable housing and will be located within a jurisdiction with a population of fewer than 550,000 and that is not located in a coastal or bay county.

(IV) On and after January 1, 2020, until December 31, 2021, the project consists of more than 50 units and will be located within a jurisdiction with a population of fewer than 550,000 and that is not located in a coastal or bay county.

(V) On and after January 1, 2022, until December 31, 2025, the project consists of more than 25 units and will be located within a jurisdiction with a population of fewer than 550,000 and that is not located in a coastal bay county.

(ii) For purposes of this section, “skilled and trained workforce” has the same meaning as provided in Chapter 2.9 (commencing with Section 2600) of Part 1 of Division 2 of the Public Contract Code.

(iii) If the applicant has certified that a skilled and trained workforce will be used to complete the development and the application is approved, the following shall apply:

(I) The applicant shall require in all contracts for the performance of work that every contractor and subcontractor at every tier will individually use a skilled and trained workforce to complete the project.

(II) Every contractor and subcontractor shall use a skilled and trained workforce to complete the project.

(III) Except as provided in subclause (IV), the applicant shall provide to the approving authority, on a monthly basis while the project or contract is being performed, a report demonstrating compliance with Chapter 2.9 (commencing with Section 2600) of Part 1 of Division 2 of the Public Contract Code. A monthly report provided to the approving authority pursuant to this subclause shall be a public record under the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1) and shall be open to public inspection. An applicant that fails to provide a monthly report demonstrating compliance with Chapter 2.9 (commencing with Section 2600) of Part 1 of Division 2 of the Public Contract Code shall be subject to a civil penalty of ten thousand dollars ($10,000) per month for each month for which the report has not been provided. Any contractor or subcontractor that fails to use a skilled and trained workforce shall be subject to a civil penalty of two hundred dollars ($200) per day for each worker employed in contravention of the skilled and trained workforce requirement. Penalties may be assessed by the Labor Commissioner within 18 months of completion of the project using the same procedures for issuance of civil wage and penalty assessments pursuant to Section 1741 of the Labor Code, and may be reviewed pursuant to the same procedures in Section 1742 of the Labor Code. Penalties shall be paid to the State Public Works Enforcement Fund.

(IV) Subclause (III) shall not apply if all contractors and subcontractors performing work on the project are subject to a project labor agreement that requires compliance with the skilled and trained workforce requirement and provides for enforcement of that obligation through an arbitration procedure. For purposes of this subparagraph, “project labor agreement” has the same meaning as set forth in paragraph (1) of subdivision (b) of Section 2500 of the Public Contract Code.

(C) Notwithstanding subparagraphs (A) and (B), a project within a housing sustainability district that is subject to approval by the approving authority is exempt from any requirement to pay prevailing wages or use a skilled and trained workforce if it meets both of the following:

(i) The project includes 10 or fewer units.

(ii) The project is not a public work for purposes of Chapter 1 (commencing with Section 1720) of Part 7 of Division 2 of the Labor Code.

(5) Provide that a project is not eligible for approval from the approving authority if it involved or involves the subdivision that is, or, notwithstanding this chapter, would otherwise be, subject to the Subdivision Map Act (Division 2 (commencing with Section 66410)) or any other applicable law authorizing the subdivision of land, unless either of the following apply:

(A) The project has received or will receive financing or funding by means of a low-income housing tax credit and is subject to the requirement that prevailing wages be paid pursuant to subparagraph (A) of paragraph (4).

(B) The project is subject to the requirement that prevailing wages be paid, and a skilled and trained workforce used, pursuant to paragraph (4).

(6) Provide for relocation assistance for persons and families displaced from their residences due to development within the housing sustainability district.

(g) A housing sustainability district ordinance adopted pursuant to this section shall remain in effect for no more than 10 years, except that the city, county, or city and county may renew the housing sustainability district ordinance, for an additional period not exceeding 10 years, before the date upon which it would otherwise be repealed pursuant to this subdivision.

(h) This section shall not be construed to affect the authority of a city, county, or city and county to amend its zoning regulations pursuant to Chapter 4 (commencing with Section 65800), except to the extent that an amendment affects a housing sustainability district.

(i) The city, county, or city and county shall comply with Chapter 4.3 (commencing with Section 21155.10) of Division 13 of the Public Resources Code.

(a) (1) A city, county, or city and county that has proposed an ordinance establishing a housing sustainability district in accordance with this chapter may apply to the department for preliminary approval of a housing sustainability district. The department shall make a preliminary determination as to the eligibility of the proposed housing sustainability district for approval.

(2) The department shall approve an application for preliminary approval for a zoning incentive payment if it determines both that the proposed housing sustainability district ordinance meets the requirements of this chapter and the city’s, county’s, or city and county’s housing element is in compliance with Article 10.6 (commencing with Section 65580) of Chapter 3. If the department denies the application, it shall inform the applicant city, county, or city and county of the deficiencies in its application. A city, county, or city and county may reapply upon correcting those deficiencies identified in the department’s denial.

(3) The department shall transmit its determination to the applicant city, county, or city and county.

(b) A city, county, or city and county that has proposed an ordinance establishing a housing sustainability district shall submit all of the following information with its application:

(1) A description of the boundaries of the proposed housing sustainability district.

(2) A description of the developable land within the proposed housing sustainability district.

(3) A description of other residential development opportunities within the city, county, or city and county, including infill development and reuse of existing buildings within already developed areas.

(4) A copy of the city’s, county’s, or city and county’s housing element, adopted in accordance with Article 10.6 (commencing with Section 65580) of Chapter 3.

(5) A copy of the housing sustainability district ordinance adopted pursuant to Section 66201.

(6) A copy of the environmental impact report prepared pursuant to Section 21155.10 of the Public Resources Code.

(7) A copy of the city’s, county’s, or city and county’s design review standards, if any, developed pursuant to Section 66207.

(8) Any other materials that establish the city’s, county’s, or city and county’s compliance with the requirements of Section 66201.

(c) Following preliminary approval of an application pursuant to subdivision (a) and upon receipt of acknowledgment that the housing sustainability district ordinance has taken effect, the department shall confirm approval within 45 days of receipt of the application.

(a) On or before October 1 of each year following the approval of a city’s, county’s, or city and county’s housing sustainability district by the department under Section 66202, the department shall issue a certificate of compliance if it finds that the city, county, or city and county has satisfied all of the following requirements:

(1) The city, county, or city and county has in effect a housing sustainability district ordinance adopted pursuant to Section 66201.

(2) The housing sustainability district complies with the minimum requirements of subdivision (b) of Section 66201.

(3) The city, county, or city and county has only denied a permit for a residential development consistent with its housing sustainability district ordinance, the provisions of its housing element, or the requirements of this chapter.

(4) The design review standards, if any, adopted by the city, county, or city and county comply with the requirements of Section 66207.

(b) If the department finds that a city, county, or city and county does not satisfy all of the requirements of subdivision (a), the department may deny certification of the housing sustainability district. A denial pursuant to this subdivision shall not affect the validity of the housing sustainability district ordinance or the application of the ordinance to a development or proposed development within the housing sustainability district.

(c) The department may require a city, county, or city and county to provide any information it deems necessary to review that city’s, county’s, or city and county’s housing sustainability district as required by this section.

(a) (1) A city, county, or city and county with a housing sustainability district approved by the department under Section 66202 shall be entitled to a zoning incentive payment, upon appropriation of funds by the Legislature for that purpose.

(2) The amount of payment provided to a city, county, or city and county pursuant to this section shall be based on the number of new residential units constructed within the housing sustainability district. Replacement units constructed in accordance with Section 66208 and any units constructed by a developer who elects to not be subject to the housing sustainability district ordinance pursuant to subdivision (f) of Section 66205 shall not be considered new residential units for purposes of this section.

(b) The department shall issue the first half of the zoning incentive payment to the city, county, or city and county upon preliminary approval of the housing sustainability district ordinance and issuance of the environmental impact report pursuant to Section 21155.10 of the Public Resources Code. The department shall issue the second half of the zoning incentive payment within 10 days of submission of proof of issuance of building permits by the city, county, or city and county for the projected units of residential construction within the zone, provided that the city, county, or city and county has received a certificate of compliance for the applicable year pursuant to Section 66203.

(a) (1) A city, county, or city and county may incorporate provisions in its housing sustainability district ordinance prescribing the contents of an application for a permit for residential development.

(2) The city, county, or city and county may charge an application fee to persons seeking government approval of a project within the housing sustainability district. A fee charged pursuant to this paragraph shall be established to defray the costs of preparation, adoption, and administration of the housing sustainability district plan, including costs incurred related to the implementation of Chapter 4.3 (commencing with Section 21155.10) of Division 13 of the Public Resources Code. As nearly as can be estimated, the fee charged shall be a prorated amount in accordance with the applicant’s relative benefit derived from the housing sustainability district plan.

(3) The housing sustainability district ordinance may provide for referral of an application for a permit to any officers, agencies, boards, or bureaus of the city, county, or city and county for review and comment. A reviewing officer, agency, board, or bureau shall provide any comments on an application within 60 days of receipt.

(b) The applicable provisions of the city’s, county’s, or city and county’s general plan and housing sustainability district ordinance in effect at the time an application is submitted to the approving authority shall govern the application for the purposes of the following:

(1) The processing and review of the application.

(2) The pendency of any appeal of a decision of the approving authority.

(3) If the application is approved, for three years following approval of the application.

(c) (1) The applicant shall file an application for a permit with the official designated for this purpose in the housing sustainability district ordinance of the city, county, or city and county and with the approving authority.

(2) The authority shall conduct a public hearing in accordance with the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of Part 1 of Division 2 of Title 5) and issue a written decision on the application within 120 days of receipt of the application, unless extended by agreement between the approving authority and the applicant. The approving authority shall file a copy of its written decision with the official designated for this purpose in the housing sustainability district ordinance of the city, county, or city and county.

(3) If the approving authority fails to act within 120 days, or within the period agreed upon by the approving authority and the applicant, as applicable, the application shall be deemed approved. In the event an application is deemed approved pursuant to this paragraph, the applicant shall provide notice to any interested parties and notify the official designated for this purpose in the housing sustainability district ordinance of the city, county, or city and county within 14 days of the application being deemed approved. The notice provided to interested parties shall specify that any appeals must be filed within 20 days following the official’s receipt of the notice.

(4) The approving authority shall issue to the applicant a copy of its written decision, including the name and address of the owner of the property proposed to be developed, an identification of the property proposed to be developed, the development plans, and certification that a copy of the decision has been filed with the official designated for this purpose in the housing sustainability district ordinance of the city, county, or city and county.

(d) (1) In reviewing an application for a permit pursuant to this section, the approving authority shall consider the requirements of the housing sustainability district ordinance and of this chapter, including the requirement that the applicant replace affordable housing units affected by the proposed development pursuant to Section 66208.

(2) The approving authority may deny an application only for the following reasons:

(A) The proposed development project does not fully comply with the housing sustainability district ordinance.

(B) The applicant has not submitted all of the required information or paid an application fee required by the housing sustainability district ordinance and necessary for an adequate and timely design review or assessment of potential impacts on nearby property.

(C) The approving authority determines, based upon substantial evidence in light of the whole record of the public hearing on the project, that a physical condition on the site of development that was not known and could not have been discovered with reasonable investigation at the time the application was submitted would have a specific adverse impact upon the public health or safety and that there is no feasible method to satisfactorily mitigate or avoid the specific adverse impact. As used in this subparagraph, “specific adverse impact” means a significant, quantifiable, direct, and unavoidable impact based on identified objective written public health or safety standards, policies, or conditions, as in existence at the time the application is deemed complete. Nothing in this subparagraph is intended to affect thresholds of significance or standards of review for any impact reviewed pursuant to the California Environmental Quality Act (Division 13 (commencing with Section 21000) of the Public Resources Code).

(e) The official designated for this purpose in the housing sustainability district ordinance of the city, county, or city and county shall certify the following, as applicable, on a copy of the written decision of the approving authority:

(1) No appeal has been filed, or has been dismissed or denied, within 20 days of the issuance of the decision of the approving authority.

(2) The application is deemed approved by reason of the failure of the approving authority to issue a decision within 120 days of submission of the application.

(f) A developer may choose to develop a project in a housing sustainability district in accordance with the already existing land use approval procedures that would otherwise apply to the parcel in the absence of the establishment of the housing sustainability district pursuant to this chapter, and in so doing shall not receive any of the incentives and benefits or be required to comply with any of the provisions specified in the housing sustainability district ordinance or this chapter.

(a) If the approving authority denies an application for a permit submitted in accordance with Section 66205 or has approved it with conditions rendering the project infeasible for residential use, the applicant may appeal that decision by filing a complaint in the superior court.

(b) An appeal pursuant to this section shall be filed within 20 days after the approving authority has filed its decision to deny or conditionally approve the application with the official designated for this purpose in the housing sustainability district ordinance of the city, county, or city and county. The applicant shall provide notice of the appeal and a copy of the complaint to that official. The applicant shall, within 14 days of filing the complaint, serve written notice and provide a copy of the complaint to all defendants by certified mail. The court shall dismiss the complaint if the applicant does not, within 21 days of filing the complaint, file an affidavit with the clerk of the court certifying that the notices required by this subdivision have been provided.

(c) The complaint shall allege the specific reasons why the approving authority’s decision does not satisfy the requirements of the housing sustainability district ordinance, the provisions of this chapter, or other applicable law. The complaint shall name the approving authority as a defendant.

(d) The approving authority shall have the burden of proving that its decision satisfies the requirements of the housing sustainability district ordinance, the provisions of this chapter, or other applicable law based on substantial evidence in light of the whole record.

(a) A city, county, or city and county may, in accordance with the regulations adopted by the department, adopt design review standards applicable to development projects within the housing sustainability district to ensure that the physical character of development within the district is complementary to adjacent buildings and structures and is consistent with the city’s, county’s, or city and county’s general plan, including the housing element. For purposes of this section, “design review standard” means the reasonable application of qualitative design requirements that are clear and concise and consistently applied to all types of development applications, with specific terms defined or generally accepted word definitions. Design review of a development within a housing sustainability district shall not constitute a “project” for purposes of the California Environmental Quality Act (Division 13 (commencing with Section 21000) of the Public Resources Code).

(b) Design review standards adopted pursuant to this section shall be adopted at the same time as the housing sustainability district ordinance and submitted to the department with the city’s, county’s, or city and county’s application pursuant to Section 66202. Any subsequent additional design review standards or amendment of existing design review standards shall be subject to written approval by the department in the same manner as specified in subdivision (e) of Section 66201, relating to the amendment or repeal of a housing sustainability district ordinance.

(a) If a proposed development within a housing sustainability district includes any parcels being used for affordable housing at the time the application is submitted to the approving authority, the approving authority shall condition its approval of the application on the applicant’s agreement to replace those affordable housing units.

(b) For the purposes of this section, the following definitions shall apply:

(1) “Affordable housing” shall mean a parcel of property that meets any of the following criteria:

(A) The parcel includes rental dwelling units that are or, if the dwelling units have been vacated or demolished in the five-year period preceding the application, have been subject to a recorded covenant, ordinance, or law that restricts rents to levels affordable to persons and families of lower or very low income.

(B) The parcel is subject to rent or price control through a public entity’s valid exercise of its police power.

(C) The parcel includes a housing development that is currently occupied by low- or very low income households.

(2) “Replace” shall mean either of the following, as applicable:

(A) If any affordable housing units described in subdivision (a) are occupied on the date of application, the proposed housing development shall provide at least the same number of units of equivalent size to be made available at affordable rent or affordable housing cost to, and occupied by, persons and families in the same or lower income category as those households in occupancy. If the income category of the household in occupancy is not known, it shall be rebuttably presumed that lower income renter households occupied these units in the same proportion of lower income renter households to all renter households within the jurisdiction, as determined by the most recently available data from the United States Department of Housing and Urban Development’s Comprehensive Housing Affordability Strategy database. For unoccupied affordable housing units described in subdivision (a) in a development with occupied units, the proposed housing development shall provide units of equivalent size to be made available at affordable rent or affordable housing cost to, and occupied by, persons and families in the same or lower income category as the last household in occupancy. If the income category of the last household in occupancy is not known, it shall be rebuttably presumed that lower income renter households occupied these units in the same proportion of lower income renter households to all renter households within the jurisdiction, as determined by the most recently available data from the United States Department of Housing and Urban Development’s Comprehensive Housing Affordability Strategy database. All replacement calculations resulting in fractional units shall be rounded up to the next whole number. The replacement units shall be subject to a recorded affordability restriction for at least 55 years.

(B) If all affordable housing units described in subdivision (a) have been vacated or demolished within the five-year period preceding the application, the proposed housing development shall provide at least the same number of units of equivalent size, as existed at the high point of those units in the five-year period preceding the application to be made available at affordable rent or affordable housing cost to, and occupied by, persons and families in the same or lower income category as those persons and families in occupancy at that time, if known. If the incomes of the persons and families in occupancy at the high point is not known, it shall be rebuttably presumed that low-income and very low income renter households occupied these units in the same proportion of low-income and very low income renter households to all renter households within the jurisdiction, as determined by the most recently available data from the United States Department of Housing and Urban Development’s Comprehensive Housing Affordability Strategy database. All replacement calculations resulting in fractional units shall be rounded up to the next whole number. The replacement units shall be subject to a recorded affordability restriction for at least 55 years.

(C) Notwithstanding subparagraph (B), for any dwelling unit described in subparagraph (A) that is or was, within the five-year period preceding the application, subject to a form of rent or price control through a local government’s valid exercise of its police power and that is or was occupied by persons or families above lower income, the city, county, or city and county may do either of the following:

(i) Require that the replacement units be made available at affordable rent or affordable housing cost to, and occupied by, low-income persons or families. If the replacement units will be rental dwelling units, these units shall be subject to a recorded affordability restriction for at least 55 years. If the proposed development is for-sale units, the units replaced shall be subject to paragraph (2).

(ii) Require that the units be replaced in compliance with the jurisdiction’s rent or price control ordinance, provided that each unit described in subparagraph (A) is replaced. Unless otherwise required by the jurisdiction’s rent or price control ordinance, these units shall not be subject to a recorded affordability restriction.

(D) For purposes of this paragraph, “equivalent size” means that the replacement units contain at least the same total number of bedrooms as the units being replaced.

(a) The department shall be responsible for the administration of this chapter. The department may review, adopt, amend, and repeal standards, forms, or definitions to implement this chapter. Any standards, forms, or definitions adopted to implement this chapter shall not be subject to Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2.

(b) (1) The department shall conduct, or cause to be conducted, an annual review of the housing sustainability district program. The department may require participating cities and counties to provide data on housing sustainability districts within their jurisdiction as necessary to conduct this review and prepare the report required by this subdivision.

(2) The department shall publish a report on its Internet Web site no later than November 1, 2018, and each November 1 thereafter. The report shall include all of the following:

(A) The status of the program through the fiscal year prior to the publication of the report.

(B) An identification and description of cities and counties seeking preliminary determination from the department.

(C) An identification of approved housing sustainability districts and the incentive payments awarded for each pursuant to Section 66204.

(D) A summary of the land area within both proposed and approved housing sustainability districts and the purposes for which it is zoned.

(E) The number of projects under review by an approving authority, proposed residential units, building permits issued, and completed housing units as of the date of the report’s publication.

(F) An estimate, for the current and immediately succeeding fiscal year, of the number and size of proposed new districts, potential number of residential units allowed in new districts, and anticipated construction activity.

If a city, county, or city and county reduces the density of sites within the district from the levels required pursuant to paragraph (3) of subdivision (b) of Section 66201, the city, county, or city and county shall return the full amount of zoning incentive payments it has received under this chapter to the department. Amounts repaid pursuant to this section shall be used for further incentive payments.

A lead agency shall prepare an environmental impact report when designating a housing sustainability district pursuant to Section 66201 of the Government Code to identify and mitigate, to the extent feasible, environmental impacts resulting from the designation. The environmental impact report shall identify mitigation measures that may be undertaken by housing projects in the housing sustainability district to mitigate the environmental impacts identified by the environmental impact report.

This division does not apply to a housing project undertaken in a housing sustainability district designated by a local government if all of the following are met:

(a) The lead agency has certified an environmental impact report for the housing sustainability district, and the Department of Housing and Community Development has approved the housing sustainability district pursuant to Section 66202 of the Government Code, within 10 years of the lead agency’s review of the housing project.

(b) The housing project meets the conditions specified in the designation for the housing sustainability district.

(c) The housing project is required to implement appropriate mitigation measures identified in the environmental impact report prepared pursuant to Section 21155.10 to mitigate environmental impacts identified by that environmental impact report.